As special counsel Robert Mueller builds his case, relatives of former National Security Adviser Michael Flynn are among those pressing the president to use his unique legal power and ‘put these defendants out of their misery.’

— The Bank of England kept interest rates unchanged today but said if the economy follows its projected path, “then monetary policy could need to be tightened by a somewhat greater extent over the forecast period.” Chief economist Andrew Haldane had predicted in June that this shift to tightening would depend on stronger wage and economic growth, and on more political certainty. None of those benchmarks have improved much since June.

— Brexit won’t be just an annoyance, but more of a headache, European Commission President Jean-Claude Juncker told POLITICO, adding that the Commission’s “working hypothesis” is that Brexit will happen, eventually and the process is unlikely to be reversed. Juncker added that he only spends “as much time as it needs” on Brexit, and he’s focused instead on “the EU’s positive agenda.”

— Viewed from Brussels, the U.K. seemed so ill-prepared in the early rounds of Brexit negotiations that some EU countries think it must be a trap. Trade attachés in particular who know their British colleagues as tough, canny negotiators are suspicious of the seemingly fickle and aimless procrastination from the British government. “A non-prepared British government official simply doesn’t exist,” Maltese Prime Minister Joseph Muscat said.

— There is a black-hole at the center of the Brexit negotiations — hard-liners on either side can kick and scream, but it’s sucking everyone into its gravitational pull. Its name is transition, and its shape is Norway. Charlie Cooper and Hans Von Der Burchard examine how the U.K.’s political class are being drawn inexorably to a Brexit transition within the European Economic Area.

INSIGHT

U.K. Chancellor Philip Hammond may be public enemy No. 1 with hawkish Brexiteers, but he has a powerful new ally in his push for a softer Brexit — the weakness of the British economy.

Recent poor economic numbers, including figures showing the eurozone has grown twice as quickly as the U.K., has strengthened Hammond’s argument that the last thing Britain needs is the economic shock of leaving the EU single market and customs union at the same time.

Today’s trimmed forecast (1.7 percent growth in 2017 and 1.6 percent growth in 2018) from the Bank of England, with an assessment that the economy will remain “sluggish,” only helps his cause at the Cabinet table.

Those starting to believe and hope Brexit will not happen often cite a turning of the economic tide as a key factor which could halt Brexit. John Kerr, the British diplomat who wrote Article 50, the clause that triggered the U.K.’s exit from the EU, told POLITICO in July he believes public opinion will turn if and when the economic situation worsens.

The issue for hopeful Remainers so far has been that although the economic news has not been spectacular, it has not been terrible either. The shrill warnings of economic Armageddon from former Chancellor George Osborne during the referendum campaign were dismissed as Project Fear by the Leave campaign. Most voters believed them and were proved right — at least in the short term. Even now, a year on from the referendum, unemployment remains at its lowest level since 1975.

And for many Leave voters, their Brexit ballot was not about the economy anyway. A YouGov poll this week found that 61 percent would be content to see “significant damage” to the U.K. economy as the price for leaving the EU.

But things might be different if and when economic pain starts to become a reality and Wednesday’s Eurobarometer survey suggests that perceptions are beginning to shift. Brits are becoming increasingly pessimistic about the prospects for the U.K. economy over the next year, with 6 percent fewer people in the U.K. believing their economic situation will get better in the next 12 months. The EU28 as a whole went the other way, with a 4 percent bounce in optimism about their own economies.

That might begin to feed into backing for a Brexit reversal, but it might be too late. A senior former Whitehall official said he fears business and the population will only really feel the economic impact once Britain leaves the EU and Brexit can no longer be stopped.

Most MPs are biding their time, unwilling to stick their heads above the parapet until public opinion shifts.

But in the government, Hammond has got his mojo back. Poor economic numbers will only back up his post-election push for the British government to prioritize the economy and jobs in Brexit negotiations, and give the leader of the soft Brexit Cabinet faction even more swagger.

— Australian ministers have started preliminary discussions with the U.K. about easing travel restrictions to make it easier for its citizens to come to Britain, the country’s high commissioner in London said. The Australian government is developing plans on issues it wants included in a free-trade agreement with the U.K, High Commissioner Alexander Downer said.

— Britain plans to create a new body to investigate and tackle incidents of unfair trade when it leaves the EU, according to a job advert for a “digital design lead” on a government website. The “U.K. Trade Remedies Organisation,” with about 130 staff, would be part of the trade department, and would be legislated for in a new Trade Bill to be introduced to parliament in September. The advert predicts the organization would need to be operational by October 2018.

— Prime Minister Theresa May has been forced to defend her appointment of “trade envoys” to champion the U.K.’s bilateral relationships after senior Tory Iain Duncan Smith called for them to be sacked as a result of their opposition to Brexit. “It is quite absurd that at the moment the U.K. leaves the EU and starts to make new free-trade deals, we should have as our trade representatives people who are viscerally opposed to Brexit,” he told Brexit Central.

— “We always have to look at the worst possible outcome without attaching probabilities or speculating on the expected outcome … We are asking banks to do the same for their own institution-specific situation, and then what we need to do is to see how we can prepare the financial system for potentially negative developments,” the executive director of the European Banking Authority Adam Farkas told POLITICO of the prospect of stricter financial regulations post Brexit.

— One of Britain’s core post-Brexit trade priorities will be to reduce high tariffs on its food and drink exports, including Scotch whisky, according to a British government statement. The Department for International Trade will seek to facilitate access for U.K. products by negotiating tariff reductions with markets outside the EU, it said.

— The U.K. could remain in the single market and control immigration after Brexit, but being out of the “far from perfect” single market could also be a growth opportunity for the U.K., Tim Roache, general secretary of the third largest U.K. labor union, GMB, said on the BBC Today program.

— In a go-for-broke move, U.K.-based financial firms are pushing for a post-Brexit free-trade agreement on financial services. Some in the City of London hope such a bold deal would preserve most of their current status while avoiding becoming humiliating “rule-takers.” The only problem? There is no precedent, not to mention that the EU has made it clear that sector-by-sector negotiations would not be allowed.

— The London Stock Exchange Group has set up a Brexit unit to advise policymakers on how to protect London as a financial hub and prevent the divorce shattering financial-market infrastructure, Bloomberg reported. The program, which U.K. regulators asked LSE to set up, will engage with British and European officials to guide them on Brexit’s impact on markets. LSE’s goal is to maintain the continuity of cross-border financial services and prevent financial-market fragmentation.

— While the House of Commons education committee believes “continued membership of Erasmus+ [the EU’s student exchange program] would be the best outcome for the U.K.”,future British participation is in jeopardy thanks to the government’s red line on freedom of movement after Brexit. But is there a way around it? The Times Higher Education investigates.

— U.K. Environment Secretary Michael Gove on Wednesday gave his strongest assurance that EU vessels would still be granted rights to fish in British waters after Brexit. At a meeting in Denmark, Gove said that British fishermen did not have the capacity to fish U.K. waters and so EU boats would be allowed in, according to Niels Wichmann, managing director of the Danish Fisheries Association, who was quoted in Finans newspaper.

— The bill Britain must pay for moving the European Medicines Agency from London after Brexit has soared to a staggering £520 million, the Independent reported.

— Arlene Foster, the leader of Northern Ireland’s Democratic Unionist Party, on Wednesday criticized Irish Prime Minister Leo Varadkar for “disrespecting” people who voted for Brexit by saying he still hoped the U.K. would remain in the EU, or at least in the single market. Foster said: “He may be hopeful, but that is disrespecting the will of the British people.”

— “The Grand Canyon is a minor crevice compared to the vast chasm of ignorance of [Donald Trump],” former Scottish First Minister Alex Salmond said. Salmond was responding to Trump’s interview with the Wall Street Journal, in which the U.S. president said Scotland would never vote for independence because “it would be terrible.” Much of Trump’s concerns about Scottish independence seemed to stem from golf.

— Samantha Cameron’s navy and orange referendum dress was bought with a Remain victory in mind, the wife of former PM David told Harper’s Bazaar. “I’d actually bought it for winning the election because it was upbeat, along with another for losing, but I ended up wearing the wrong one,” Cameron says in the September issue.

— As relations between the EU and U.K. get frostier thanks to Brexit, here’s a tactic guaranteed to at least annoy your opponent — rename the street on which their embassy sits in honor of someone they don’t like. Imagine the hilarity if Avenue d’Auderghem, the Brussels location of the British Embassy, were renamed “€100 Billion Brexit Bill Boulevard,” or, perhaps most hurtful of all, “Germans Always Win on Penalties Platz.” Of course, the European Commission’s Smith Square location in London could also become “Up Yours Delors Terrace.”